Rebounding sentiment: Customers wait to enter a jewellery shop during the Lunar New Year holidays in Hanoi. Vietnam’s industrial production increased 18.3% in January. — Bloomberg
HANOI: Factories are increasing production from the first months of this year, with improvements in orders coupled improving domestic consumption.
The conditions are creating optimism for economic recovery after a difficult period.
Unlike in 2023, the garment and textile industry is seeing positive signals.
Vinatex Da Nang returned to work right after the Tet Lunar New Year holiday. The company’s director Nguyen Tiep Hiep said they now had enough orders to ensure jobs for workers till the end of July, adding that the company would increase searches for orders, recruit more workers and increase pay by one million to two million dong per employee per month this year.
Coffee producer Simexco Dak Lak is speeding up production and striving to complete 500 containers for export within two weeks after the traditional holiday. Le Thanh Son, the company’s director, said that the company aims to export 125,000 tonnes of coffee this year.
Loc Troi Group has also won a bid to export 60,000 tonnes of rice to Indonesia. The group has received export orders for the first half of this year.
Industrial production increased by 18.3% in January, while exports jumped by 42%. These are positive early signals, Industry and Trade Minister Pham Hong Dien said. However, the improvement is still largely dependent on global political and economic developments, he added.
According to VinaCapital chief economist Michael Kokalari, production accounted for nearly 25% of Vietnam’s gross domestic product (GDP), meaning that improved production will accelerate GDP growth.
The Vietnamese economy will be boosted by increased production and higher consumption this year, thanks to improvements in employment in the manufacturing sector. Consumer confidence and domestic demand, which were weak in 2023 due to layoffs and real estate industry problems, will recover significantly.
Although consumer spending is not expected to grow strongly in the first quarter, it will be better in the latter half of this year.
Gabor Fluit, chairman of the European Chamber of Commerce in Vietnam (EuroCham), said that Vietnam had emerged as a leading destination for investments, signalling economic recovery on a wide scale. The prospect was promising but it would still require cautious observation, he said.
The business confidence index is still below average and more than a third of enterprises expect inefficient operation.
Planning and Investment Minister Nguyen Chi Dung said risks are forecast to remain in 2024 because of the world political and economic environment which could cloud Vietnam’s economic recovery.
The situation requires prompt response and adaptation to take advantage of opportunities, such as the green economy, green growth, digital economy and circular economy, for breakthrough development and to fuel growth momentum in order to enhance internal capacity and economic resilience, the minister said. — Viet Nam News/ANN
